THE BOARD OF VALUERS, APPRAISERS AND

ESTATE AGENTS, MALAYSIA.

MALAYSIAN PROPERTY MANAGEMENT STANDARDS

A-27-15, LEVEL 27, TOWER A, MENARA UOA BANGSAR,

NO. 5, JALAN BANGSAR UTAMA 1, 59000 KUALA LUMPUR.
TEL: 03-2288 8815, 2288 8816, 2288 8817 FAX: 03-2288 8819
URL: http://www.lppeh.gov.my
 MALAYSIAN PROPERTY MANAGEMENT
STANDARDS

The Board of Valuers, Appraisers And Estate Agents, Malaysia.

 FOREWORD

National Development and National Economic growth has led to greater urban
growth resulting in intensifying and maximizing land use. Greater commercial
developments have led to bigger and larger purpose built offices and sophisticated
shopping complexes. Urban living has been profoundly changed due to high rise
developments. Although buildings are durable and are built to last a. 'long tome, they
have to be managed physically and economically.

Professional Property Management is a regulated profession in this country. The

Valuers, Appraisers and Estate Agents' Act (Act 242) has set up the Board of
Valuers, Appraisers and Estate Agents to register, regulate and ensure compliance
to rules and regulations and code of ethics for Property Managers. It is the duty of
the Board to ensure that professional property managers carry out their duties and
comply with every aspect of professional practice.

With this in mind, the Board has developed the Malaysian Property Management
Practice Standards, a set of practice standard that will senable professional property
managers to carry out their practices. Just like the Malaysian Valuation Standards
and the Estate Agency Standards for valuers and estate agents respectively, these
standards will be the yardstick of measurement for property management
practitioners. The Board is confident that with the implementation of these standards,
the professionals and all those in the industry will be able to carry out their jobs
effectively and efficiently.

These Standards will be used to develop and determine the good practices in
professional property management. The Standards have been long in the making
and the Board hopes that with its implementation, the consuming public will be
protected from erring practitioners, because the Standards will also serve as a
deterrent to erring practitioners.

I would like to congratulate and express my appreciation to the authors of this

standards especially to the Property Management Committee of the Board and the
practitioners from ISM and PEPS whose concerted and commendable efforts
resulted in the creation of these standards.

DATO SR. ABDULLAH THALITH BIN MD THANI

President
Board of Valuers, Appraisers and Estate Agents Malaysia
1 May 2010
 PREFACE

The management of real estate involves many facets from managing accounts and
finances of the real estate, tenant relations, staff and vendor's management code
and regulatory compliance, insurance matters, health and safety issues to general
maintenance. The Property Manager should be well versed in his role and provide a
high standard of service to his Client. As a property professional, the Property
Manager must be competent in real estate finance, building construction and
maintenance, real estate laws and taxation as well as general management.

In Malaysia, the Valuers, Appraisers and Estate Agents Act 1981 (Act 242) defines
property management as,

"the management, maintenance and control of any land, building and any
interest therein, excluding the management and maintenance of property-
based businesses, on behalf of the owner for a fee..."

It is compulsory for those offering property management services for a fee to be

registered with the Board of Valuers, Appraisers and Estate Agents, Malaysia. The
Board of Valuers, Appraisers and Real Estate Agents is the legislated supervisory
and regulatory body that issues annual authority to practice for practising
professionals providing real estate services including those providing property
management services. Property Managers should be qualified in real estate
management or its equivalent with appropriate professional and supervised training.

The Strata Titles Act 1985 (Act 318) and the Building and Common Property
(Maintenance and Management) Act 2007 (Act 663) addresses the management
and maintenance of the common properties comprising common areas, facilities and
amenities in strata titled buildings and lands. These two Act spells out the statutory
duties and powers of the Joint Management Bodies and Management Corporations
and that gave rise to the need for professional Property Managers for the
management and maintenance of common properties.

When entrusted with the management of a property, the Property Manager has
fiduciary obligations to act lawfully, competently, diligently, impartially and in
accordance with the Client's instructions and objectives. Fiduciary obligations
represent the highest level of responsibility under the law in a service industry. In the
case of property management services, "Trust", "Integrity", "Honesty" "Fairness" and
"Professionalism" underpin this specialist service dispensed by the Property
Manager.

A code of practice standards is necessary to ensure practitioners provide an

accepted standard of professional service and forms a basis for best practice in
property management services. The Standards can also be used as a measure of
performance to benchmark and also to judge whether a Property Manager has
performed his task professionally.
Each Standard deals with a certain aspect of property management. Within each
standard is an INTRODUCTION to the standard which sets out the broad objectives,
the STATEMENTS OF STANDARD and followed by EXPLANATIONS in the last
section.

These Standards aims to cover the key aspects of property management but should
not be taken as exhaustive. It is expected for Property Managers to use this
Standards and adhere to its principles and directives carefully to achieve the
required standards of property management. The Standards are mandatory and
shall come into force on 1 June 2010. Property Managers are required to adhere to
the standards strictly.
CONTENTS

Foreword.............................................................................................'

Preface...................................................................................................................

Definitions And Meanings As Used In The Standards............................................v

STANDARD 1..........................................................................................................1
THE PROPERTY MANAGER

STANDARD 2..........................................................................................................4
APPOINTMENT OF A PROPERTY MANAGER

STANDARD 3..........................................................................................................6
HANDING OVER/TAKING OVER OF PROPERTY

STANDARD 4..........................................................................................................9
BUILDING MANAGEMENT

STANDARD 5........................................................................................................11
MAINTENANCE MANAGEMENT

STANDARD 6........................................................................................................15
FINANCIAL MANAGEMENT

STANDARD 7........................................................................................................19
ADMINISTRATIVE MANAGEMENT

STANDARD 8........................................................................................................21
INSURANCE MANAGEMENT

STANDARD 9........................................................................................................24
HEALTH, SAFETY & EMERGENCY MANAGEMENT

STANDARD 10......................................................................................................26
TENANCY/LEASE MANAGEMENT

DEFINITIONS AND MEANINGS AS USED IN THE STANDARDS

"Act 242" means the Valuers, Appraisers and Estate Agents Act
1981 (as amended);

"Act 318" means the Strata Title Act 1985 (as amended);

"Act 663" means the Building and Common Property

(Maintenance and Management) Act 2007;

"Board" means the Board of Valuers, Appraisers and Estate

Agents, Malaysia;

"Building Maintenance means the property management account in relation to

Account" an intended subdivided building or land that is opened
and maintained by the developer for his completed
building(s) in a development area under section 16 of
Act 663 until the Joint Management Body is
established;

"Building Maintenance Fund" means the property management account in relation to

an intended subdivided building or land that is opened
and maintained by the Joint Management Body in a
development area under section 22 of Act 663 until the
Management Corporation is established;

"By-laws" means the by-laws which are in operation as house

rules for that building or land made under in relation to
a subdivided building or land under Act 318, section 44
and as statutory by-laws provided for in the Third
Schedule of the Act. Whereas, the by-laws in relation
to a building or land intended for subdivision under Act
663 are the house rules made under section 14 of the
Act;

"Commissioner" means the Commissioner of Buildings appointed

under section 3 of Act 663;

"Common property" means so much of the development area or lot as is

not comprised in any parcel, in relation to a
development area or lot, such as the structural
elements of the building, stairs, stairways, fire escapes,
entrances and exits, corridors, lobbies, fixtures and
fittings, lifts, refuse chutes, refuse bins, compounds,
drains and water tanks, sewers, pipes, wires, cables
and ducts that serve more than one parcel, the exterior
of all common parts of the building, playing fields and
recreational areas, driveways, car parks and parking
areas, open spaces, landscape areas, walls and

 fences, and all other facilities and installations and any
part of the land used or capable of being used or
enjoyed in common by all the occupiers of the building;

"Developer" means any person or body of persons (by whatever

name described), who develops any land for the
purpose of accommodation including accommodation
for commercial and industrial use and includes the
executors, administrators and successors in title or
permitted assigns of such person or body of persons;

"Local authority area" means any area in a State that has been declared by
the State Authority to be a local authority in
accordance with section 3 of the Local Government Act
1976 [Act 171];

"Joint Management Body" means the Joint Management Body (JMB) established
under section 4 of Act 663;

"Management Corporation" means the management corporation established under

section 39 of Act 318 in relation to any subdivided
building or land shown in an approved strata plan;

"Management Fund" means the property management account that is

opened and maintained by the Management
Corporation in a strata titled development under
section 45 of Act 318 in relation to a subdivided
building or land;

"Managing Agent" means a registered valuer under Act 242 appointed by

the Commissioner of Buildings under section 25 of Act
663 or a registered valuer or registered valuation
company appointed by State Authority under
subsection 10B(6) Of Act 318 or by the Commissioner
of Buildings under section 50 of Act 318;

"Property-based business" includes a hotel, motel, hostel, plantation, quarry,

marina, port, golf course, cinema, stadium, sports
complex and hospital;

"Property management" means the management and control of any land,

building and any interest therein, excluding the
management of property-based businesses, on behalf
of the owner for a fee and includes but is not limited to
the following responsibilities:

(a) monitoring outgoings for the property and

making payments out of the income from the
property;
(b) preparing budgets and maintaining the financial

 records for the property;
(c) enforcing the terms of leases and other
agreements pertaining to the property;
(d) advising on sale and purchase decisions;
(e) advising on insurance matters;
(f) advising on the opportunities for the realisation
of development or investment potential of the
property; and
(g) advising on the necessity for upgrading the
property or for the merging of interests;

"Property Manager" means a person, a firm or a company who, on behalf of

the owner of any land, building and any interest
therein, manages and controls such land, building and
interest to maintain or increase the investment in, or
physical worth of, such property;

"Sinking fund" means the capital expenditure account opened and

maintained for the completed building(s) in a
development area by the developer or the Joint
Management Body under section 24 of Act 663 in
relation to an intended subdivided building or land;

"Special Account" means the capital expenditure account opened and

maintained by the Management Corporation of the
development under section 46 of Act 318 in relation to
a subdivided building or land.

 MALAYSIAN PROPERTY MANAGEMENT STANDARDS

STANDARD 1

THE PROPERTY MANAGER

1.1.0 INTRODUCTION

1.1.1 Property management is a regulated professional practice governed by the

Valuers,Appraisers and Estate Agents Act 1981 (Act 242) which defines
Property Management and the role of Property Managers in the management
of properties.

1.1.2 This Standard specifies the duties, qualification and code of conduct of the
Property Manager so that the Client as well as the general public are assured
of a high standard of service that will be provided by professional property
managers.

1.2.0 STATEMENTS OF STANDARD

1.2.1 The Property Manager shall comply with the provisions of Act 242, Act 318
and Act 663 as well as all relevant regulations, standards, guidelines and
circulars issued by the Board and other relevant authorities.

1.2.2 The Property Manager shall be qualified, competent and experienced in

managing real estate and shall be registered with the Board of Valuers,
Appraisers and Estate Agents, Malaysia.

1.2.3 The Property Manager shall ensure that all contracts are signed by the Client
unless the Property Manager is required and authorized in writing by the
Client to sign any of the contracts on behalf of the Client.

1.2.4 The Property Manager shall sign important reports and documents prepared
by him.

1.2.5 The Property Manager shall be honest and independent and shall adhere to
the code of conduct and ethics under Act 242 and other relevant statutes and
regulations.

1.2.6 The Property Manager shall be adequately covered by professional indemnity

insurance.

1.3.0 EXPLANATIONS

1.3.1 Section 19(c) of Act 242 stipulates that no one other than those registered
with the Board of Valuers, Appraisers and Estate Agents shall be authorised
to practise property management for a fee.

 The law states that anyone practicing property management without an
authority to practice will be guilty of an offence under the Act which carries a
maximum fine of RM 25,000 or jail sentence of three (3) years or both.

1.3.2 Act 242 gives exemptions to property based businesses to be managed by

specialist managers other than Property Managers. These property based
businesses includes hotels, motels, hostels, plantations, quarries, marinas,
ports, golf courses, cinemas, stadiums, sports complexes and hospitals.

1.3.3 The Property Manager may be appointed as the Managing Agent by the State
Authority under section 10B(6) or by the Commissioner of Buildings under
Section 50 of the Strata Titles Act 1985 (Act 318) to exercise the powers and
discharge the duties and functions of a management corporation.

1.3.4 The Building and Common Property (Maintenance and Management) Act
2007 (Act 663) further permits the Commissioner of Buildings to appoint a
Property Manager as Managing Agent where the maintenance and
management of a building is found to be unsatisfactory.

1.3.5 The Property Manager shall deliver his services professionally and observe
the professional ethics and code of conduct expected of him as a professional
outlined as below :

i. adhere and advocate within the industry to the spirit of conforming to and
complying with all applicable laws and regulations;

ii. shall practice his profession with honesty, integrity and shall always act in
the best interest of the Client;

iii. affirm and commit to a mission towards professional practice above

personal gain;

iv. continuously improve knowledge and skills, as well as faithfully observe,

practice and comply with every standard, directive, circular, guideline and
decision of the Board;

v. inspire and encourage others to embrace and practice these ethical

principles and standards through their own sense of dedication and
professionalism;

vi. possess a working knowledge of the codes of conduct and ethics

propagated by other professional organisations that serves the real estate
industry;

vii. maintain the high standards of his profession and cooperate with the
Board to protect the public against fraud, misrepresentation and unethical
practices in property management and any other act or omission by
persons practising property management which may bring disrepute to the
profession;

 viii. avoid any criminal offence or professional misconduct;

ix. shall not express or communicate to the public any criticism or comment
on the professional services or conduct of, or professional fees charged by
a fellow registered Property Manager.

The above guidelines and code of ethics are not exhaustive and serves as a
guide.

 MALAYSIAN PROPERTY MANAGEMENT STANDARDS

STANDARD 2

APPOINTMENT OF A PROPERTY MANAGER

2.1.0 INTRODUCTION

2.1.1 The engagement of a professional Property Manager is contractual in nature.

Therefore, it is important that the Property MaAnager ensures that he obtains
a written appointment to manage from the owner or the Council of
Management Corporation (MC) or the Joint Management Committee (JMC) of
Joint Management Body (JMB) or the Commissioner of Buildings (COB), as
the case may be (hereinafter referred to as 'the Client') followed by an
agreement or contract.

2.2.0 STATEMENTS OF STANDARD

2.2.1 The Property Manager shall enter into a written Agreement with his Client in
respect of his appointment as a Property Manager.

2.2.2 The Property Manager shall ensure that the Property Management
Agreement includes the following:

i. the scope of work in the services to be provided by the Property Manager;

ii. the professional fees, disbursements, taxes, salaries and other payments
agreed upon;

iii. the term or period of appointment;

iv. the relevant terms and conditions of his engagement.

2.3.0 EXPLANATIONS

2.3.1 An executed Agreement with the Client ensures all scope of work in the
services are understood and mutually agreed upon in the interest of both
parties. The scope of work in the services covered by the Property Manager
may include but not limited to the following:

i Handing/Taking Over;
ii. Building Management;
iii. Maintenance Management;
iv. Financial Management;
v. Administrative Management;
vi. Insurance Management;
Health, Safety & Emergency
vii.
Management;

 viii. Tenancy/Lease Management.
2.3.2 The fees, charges and disbursements chargeable by the Property Manager
are stipulated in the Seventh Schedule (Rule 48) of Act 242 and is the basis
for the computation of professional fees and related charges.

2.3.3 It is the Property Manager's obligation to perform the agreed scope of works
to a reasonable standard as per the terms and conditions of the Property
Management Agreement. The Property Management Agreement gives the
Client the assurance that professional and fiduciary approaches are adopted
by the Property Manager in the discharge of his duties and responsibilities.

 MALAYSIAN PROPERTY MANAGEMENT STANDARDS

STANDARD 3

HANDING / TAKING OVER OF PROPERTY

3.1.0 INTRODUCTION

3.1.1 A proper handing/taking over of the property by the Property Manager is the
first but essential step in the provision of the Property Management services.
It is important to ensure that all the relevant assets, documents and records
on the maintenance and management of the property are properly handed or
taken over by the Property Manager.

3.2.0 STATEMENTS OF STANDARD

3.2.1 The Property Manager shall prepare and set out clearly a defined checklist to
ensure the successful handing/ taking over of the relevant assets, documents
and records with regards to the maintenance and management of the
property.

3.2.2 In the taking over of the property, it is important to check and ensure that all
the relevant documents and financial records of the property together with the
audited accounts are handed over.

3.2.3 Upon taking over the property, the Property Manager shall carry out a general
inspection audit to establish the current state of repair and condition of the
building, infrastructure, installation and facilities; required rectification of
defects and deficiencies to ensure proper upkeep of the property. This shall
be documented in the form of a Building Audit Report. If there is a need to
carry out any form of test or investigation requiring specialized knowledge,
skill, equipment or instrument, the Client shall, at his own cost, appoint a
specialist consultant to conduct such test or investigation.

3.2.4 The Property Manager shall implement the deed of mutual covenants, house
rules and by-laws established for the property management of the property.
The Property Manager shall advise and assist the Client to review and make
amendments to the deed of mutual covenants, house rules and by-laws as
and where necessary.

3.2.5 Upon the expiry or termination of the Property Management Agreement, the
Property Manager shall return to the Client or his appointed agent, the said
assets, documents and records.

3.3.0 EXPLANATIONS

3.3.1 Good and proper documentation of stock inventory, assets and equipment
will assist the Property Manager in the effective management of the property.

3.3.2 It is important that the Property Manager receives the latest management
account and audited account to establish the opening balance upon taking
over of the property.
3.3.3 The Building Audit Report is basically a report on the building condition based
on a visual general inspection of all the relevant components of the building or
the common property, as the case may be, comprising the fabric,
infrastructure, installation and facilities to establish their current state ot
repairs and condition. If there is a need to carry out any form of test or
investigation requiring specialised knowledge, skill, equipment or instrument,
the Client shall, at his own cost, appoint a specialist consultant to conduct
such test or investigation. It is important that the above is made known to the
Client in the scope of work of the Property Manager in order to avoid any form
of misunderstanding by the Client.

3.3.4 If there is any serious defect suspected in the civil and structural components
or the mechanical and electrical components of the building or the common
property, as the case may be, during the general inspection audit of the
building, the Client shall, at his own cost, appoint the original appointed
project engineering consultant or any other specialist engineering consultant
to carry out a detailed engineering investigation together with proposal for
remedial works.

3.3.5 The Building Audit Report is useful for the planning, budgeting and carrying
out of maintenance, repairing, refurbishment and upgrading works; and also
for the drawing up of a preventive maintenance plan. A copy of the Building
Audit Report duly signed by the Property Manager will be given to the Client.

3.3.6 Deed of mutual covenants, house rules and by-laws are drawn up for the
proper administration of multi-occupied buildings especially of common
facilities and amenities and for their smooth and safe operation.

3.3.7 It is good practice that all Building Audit Reports, records, house rules and
documents are updated and reviewed for subsequent handover to the Client
or his agent upon the expiry/termination of the Property Management
Contract. This ensures a smooth and professional transition to the next
Property Manager.

 MALAYSIAN PROPERTY MANAGEMENT STANDARDS
STANDARD 4

BUILDING MANAGEMENT
4.1.0 INTRODUCTION

4.1.1 One of the important tasks undertaken by the appointed Property Manager is
to set up a building management system customised for the property.

4.1.2 A well set up building management system will ensure the smooth operation
of the building facilities and services at the optimum operation cost.

4.2.0 STATEMENTS OF STANDARD

4.2.1 The Property Manager shall set up a suitable site building management office,
subject to the Client's approval.

4.2.2 The Property Manager shall ensure suitable and an adequate number of
persons to administer the site office and manage the day to day operations.

4.2.3 It is the duty of the Property Manager to design and implement the relevant
policies and procedures for the property and ensure all necessary controls are
in place.

4.2.4 The Property Manager shall prepare, review and implement standard
operation procedures (SOP) for the administration of the site office, site
personnel, vendors and service contractors.

4.2.5 The Property Manager shall formulate management and maintenance

procedures to ensure efficient supervision and management of the property.

4.3.0 EXPLANATIONS

4.3.1 It is necessary to set up a site office where the Property Manager can manage
all site operations. The cost of the setup of the site office is normally borne by
the Client.

4.3.2 The Property Manager has the responsibility to ensure competent and skilled
staff are employed and deployed. The cost of the site office personnel is
normally borne by the Client. He shall recommend and propose the
appropriate organisational structure for the Client's approval.

4.3.3 Building operational policies and systems ensure all aspects of building
maintenance, repairs and supervision are undertaken within the parameters of
the Client's expectations. It lays the foundation for the efficient carrying out of
daily operational work. The Property Manager shall also liaise and co-ordinate
with other consultants, external contractors and relevant Government
agencies on maintenance and renovation works.

4.3.4 Standard operation procedures ensure adherence to work flow and consistent
performance by site staff, suppliers and service providers.

 MALAYSIAN PROPERTY MANAGEMENT STANDARDS

STANDARD 5

MAINTENANCE MANAGEMENT

5.1.0 INTRODUCTION

5.1.1 Maintenance is a key aspect of property management and it is essential that

the building is kept in good condition and facilities in an optimum operable
state. As such, a comprehensive maintenance management programme in
accordance with the Client's objectives and investment strategies must be
devised and implemented.

5.1.2 A comprehensive maintenance management programme of a property should

cover the following areas:

i. Corrective Maintenance;
ii. Planned Maintenance;
iii. Service Providers.

5.2.0 STATEMENTS OF STANDARD

5.2.1 CORRECTIVE MAINTENANCE

Corrective maintenance requires a systematic process to ensure the effective

rectification / replacement of the defective or malfunctioned facilities and equipment.

i. Corrective maintenance works must be undertaken in compliance with the

Client's objective;

ii. The Property Manager shall monitor and supervise all works in
accordance with the conditions of the award of such works;

iii. The Property Manager shall establish an effective system and procedures
to handle repairs and replacements;

iv. The Property Manager shall establish an effective stock and inventory
record system and procedure for utilisation during corrective maintenance
activities.

5.2.2 PLANNED MAINTENANCE

A systematic planned maintenance programme is important in ensuring that the

building's fabric, finishes, facilities and equipment are maintained and kept in an
optimum operating condition.

Planned maintenance is a systematic and pro-active policy and procedure of

carrying out works and activities in preventing or minimising defects or
malfunctioning of facilities and equipment prior to such an occurrence.

 i. The Property Manager shall formulate and prepare a detailed and
systematic planned maintenance schedule in accordance with the
manufacturer's recommendations and international best practices;

ii. The Property Manager shall monitor and supervise the planned
maintenance works to ensure they are being undertaken in accordance
with the pre-agreed schedule and scope of work and is completed with
good workmanship;

iii. The Property Manager shall keep proper records of operating and
maintenance manuals and ensure timely renewal of all licenses, permits
and certificates;

iv. The Property Manager shall also keep abreast and be well acquainted with
all relevant laws, amendments or additions to any codes and/or standards
introduced and advise the Client accordingly.

5.2.3 SERVICE PROVIDERS

Effective maintenance of building facilities and services are essential to protect an

asset's value. Hence, qualified, skilled and experienced service providers are
necessary to ensure high quality and standards of services are being provided for
the building.

i. The Property Manager shall ensure that only qualified, skilled and
experienced specialist service providers are appointed for the provision of
the specific services. The Property Manager shall manage, administer and
supervise all appointed service providers, taking necessary action to
ensure a high level of competency and professional service is provided
and that the Client's interests are protected;

ii. The Property Manager shall maintain proper records of contracts, licenses,
insurances, manufacturer's guidelines and warranties to ensure the
services are provided effectively, efficiently and timely;

iii. The Property Manager shall formulate a comprehensive scope of work,

specifications and tender/quotation process that are transparent, clear and
enforceable;

iv. Upon a successful tender or quotation exercise, the Property Manager

shall ensure that a letter of award and/or contract stipulating the specified
terms and conditions is issued by the Client to the successful
contractor/tenderer unless the Property Manager is required and
authorized in writing by the Client to sign the letter of award and/or
contract on behalf of the Client.

5.3.0 EXPLANATIONS

5.3.1 CORRECTIVE MAINTENANCE

Property Managers must have an effective Corrective Maintenance Plan to ensure

that the rectification and remedial actions on defects, failures and malfunctions are
dealt with effectively and efficiently.

Corrective measures taken by the Property Manager must be thorough, transparent,

timely and undertaken at an optimum cost.

5.3.2 PLANNED MAINTENANCE

The Property Manager must not only understand the building he is managing but
also the services provided therein. He must have a good working knowledge of the
manufacturer's guidelines, industry best practices and the recommended
maintenance requirements.

All maintenance personnel and service providers must be made fully aware of the
Planned Maintenance Programme.

5.3.3 SERVICE PROVIDERS

The Property Manager is required to recruit relevant personnel to perform services or

to outsource some of these services to external service providers. The engagement
of in-house personnel or external service providers shall be with the approval of the
Client.

The Property Manager shall formulate job specifications in order to recruit the most
suitable candidate.

The Property Manager's duty includes the preparation and offer of award after a
successful tender exercise has been concluded. Tender opening and tender
interview for the short listed tenderers are subject to the Client's policies and
procedures. The Property Manager is to forward his recommendations and analysis
in a tender report to the Client for his consideration. A letter of award must be issued
to the successful tenderer or contractor upon receipt of the Client's approval.

The service contract is an agreement between the Client and the service provider. It
is the duty of the Property Manager to enforce the terms of the contract for service.
He must ensure that all works are done in accordance with the stipulated terms and
conditions. The Property Manager shall ensure that the Client's interest is protected
in the event of any claims arising from the failure or negligence on the contractor's
part to fulfil the terms of the contract. Any deviation from the terms and conditions
and specifications should be attended to and any defects should be immediately
rectified.

The common types of Building Services include but are not limited to
the following:-

1) Air conditioning system 15) Landscaping

2) Building automation system 16) Lifts & escalators
3) Car parking 17) Advertising & signages
4) Cleaning & sanitary 18) Pest control
5) Communications 19) Plumbing
6) Construction & engineering 20) Refuse disposal
7) Electrical & mechanical systems 21) Roller shutters
8) Fire protection system 22) Roofing
9) Flood gate 23) Security
10) Water features 24) Sewerage
11) General repairs 25) Supervising engineer
12) Gondola 26) Swimming pool
13) Insurance 27) Water proofing
14) IT equipment

 MALAYSIAN PROPERTY MANAGEMENT STANDARDS

STANDARD 6

FINANCIAL MANAGEMENT

6.1.0 INTRODUCTION

6.1.1 Financial Management is a crucial function of the Property Manager. In

carrying out his duties as a Property Manager, he must ensure that he has in
place proper accounting methods and systems to enable him to discharge his
fiduciary duties satisfactorily.
6.1.2 The Property Manager's fiduciary responsibilities include the following:

i. Collecting rental income, service charges, sinking fund and any other
charges legally imposed;

ii. Monitoring outgoings for the property and making the payments out of the
income or charges derived from the property or as funded by the Client;

iii. Preparing budgets, maintaining financial records and submitting financial

reports for the property.

6.2.0 STATEMENTS OF STANDARD

6.2.1 The Property Manager shall administer the finances of the property on behalf
of the Client according to the contractual requirements and obligations as
agreed between the Client and the Property Manager. The Property Manager
owes the Client a duty of care and must conduct his duties diligently and
responsibly in accordance to his fiduciary obligations.

6.2.2 The Property Manager shall assist his Client to maintain the respective
property management account operated by his Client, unless instructed
otherwise.

6.2.3 For subdivided or intended subdivided building and land under the Act 318
and Act 663 respectively, the Property Manager shall assist the Client to open
and administer a trust account which is operated by the Client known as the
Building Maintenance Account, Building Maintenance Fund or Management
Fund, as the case may be, for the collection of service charges and other
recoverable charges imposed by the Developer, Joint Management Body or
Management Corporation, as the case may be, and the disbursements
thereof.

6.2.4 For subdivided or intended subdivided building and land under the Act 318
and Act 663 respectively, the Property Manager shall assist the Client to open
and administer a trust account which is operated by the Client known as the
Sinking Fund Account or Special Account, as the case may be, for the
collection of sinking fund charges imposed by the Developer, Joint

 Management Body or Management Corporation, as the case may be, and the
disbursements thereof.

6.2.5 The Property Manager shall be responsible for the preparation of the Annual
Budget covering all incomes and expenditures of the property for the Client's
approval.

6.2.6 The Property Manager shall advise and determine the appropriate rate and
apportionment of service charge to be levied in accordance to agreed
amounts and relevant legislations for the Client's approval.

6.2.7 The Property Manager shall prepare and maintain proper and accurate
financial records which shall be transparent and accessible to the Client and
other authorised persons.

6.2.8 The Property Manager shall prepare a Financial Report on a monthly or other
periodic basis and submit to the Client.

6.2.9 The Property Manager shall prepare the Annual Account and ensure that this
is professionally audited by an external licensed auditor appointed by the
Client at the Client's cost.

6.2.10 The Property Manager shall implement proper measures for credit control and
debt recovery on a timely basis including taking appropriate aduom such as
issuing of reminders, imposing of interest charges and advising on the
necessity of taking legal action.

6.3.0 EXPLANATIONS

6.3.1 Whenever the scope of work in the service provided by the Property Manager
includes the collection and disbursement of monies, the property Manager
shall act in a responsible and transparent manner.

In such cases, the Property Manager shall put in place a sound accounting
system that accounts for all monies collected and expended.

6.3.2 In all cases, a separate property management account should be opened and
maintained for each individual project under property management to maintain
transparency and avoid confusion.

For subdivided or intended subdivided building and land, Act 318 and Act 663
provide for the following accounts to be opened and operated by the
developer, Joint Management Body or Management Corporation, as the case
may be :-

 i. Building Maintenance Account, Building Maintenance Fund or
Management Fund

Pursuant to Act 318 and Act 663, the developer, Join Management Body
and Management Corporation are requirec to open and operate a general
maintenance account for each individual project known respectively as the
Buildind Maintenance Account, Building Maintenance Fund of
Management Fund. The collections of service charges and othef
recoverable charges imposed by the developer, Joint Management Body
or Management Corporation, as the case may be, shall be deposited into
this account. Expenditure for the general maintenance and management
of the common property for the purposes as provided under the relevant
legislations are paid from this general maintenance account. A Statement
of Account shall be submitted to the Client on a regular (normally monthly)
basis and the Annual Accounts at the end of the agreed financial year.

ii. Sinking Fund or Special Account

Pursuant to Act 318 and Act 663, the developer, Joint Management Body
and Management Corporation are required to open and operate a capital
expenditure account for each individual project known respectively as the
Sinking Fund or Special Account. The collections of sinking fund charges
imposed by the developer, , Joint Management Body or Management
Corporation, as the case may be, shall be deposited into this account.
Expenditure for the major structural repairs, building refurbishment and
upgrading works, asset acquisitions, repainting of common property,
replacement of plant and machinery and other forms of capital expenditure
for purposes as provided under the relevant legislations are paid from this
capital expenditure account. A Statement of Account shall be submitted to
the Client on a regular (normally monthly) basis and the Annual Accounts
at the end of the agreed financial year.

6.3.3 The Property Manager should prepare a Financial Report on a monthly or

other periodic basis as agreed with the Client and submit to the Client
outlining the income and expenditure for the month with details of major
expenses and debtors' ageing report. These reports will provide the financial
status of the property to the Client.

6.3.4 As the financial accounting is done on behalf of the stakeholders whose

money is managed by the Property Manager, the Property Manager should
ensure that the accounts are audited by external licensed auditors.

6.3.5 Prompt collection of rentals and/or service charges is vital in ensuring

available cash flow and efficient management of the property. The Property
Manager is required to be diligent in the collection of arrears and take
appropriate action on defaulters.

 MALAYSIAN PROPERTY MANAGEMENT STANDARDS

STANDARD 7

ADMINISTRATIVE MANAGEMENT

7.1.0 INTRODUCTION

7.1.1 In addition to maintenance and finance, general administration forms part of

operations and this may include helpdesk and customer service functions,
maintenance of accurate and updated plans, drawings, service contracts,
servicing and equipment maintenance records as well as tenant, contractors
and consultants contact details, application and renewal of licenses, permits
and certificates and handling of petty cash.

7.1.2 The Property Manager has to put in place an administrative system with
suitable personnel to handle the above functions.

7.2.0 STATEMENTS OF STANDARD

7.2.1 The Property Manager shall compile and keep proper records, manuals,
drawings, service contracts and all other necessary documents.

7.2.2 The Property Manager shall ensure the application and timely renewal as well
as adherence to conditions of relevant licenses, permits and certificates.

7.2.3 The Property Manager shall ensure the timely settlement of statutory
payments, utilities bills, outgoings and expenses.

7.2.4 The Property Manager shall implement a system of handling and recording
enquiries, complaints and feedback.

7.2.5 The Property Manager shall keep an approved petty cash account and ensure
its proper utilisation and control.

7.3.0 EXPLANATIONS

7.3.1 A systematic and efficient administrative system will help the property
Manager to ensure the smooth operation of the building's facilities and
services. With effective and comprehensive records and documents, the
property Manager is able to make recommendations and decisions on
property management matters.

7.3.2 It is prudent for the Property Manager to inform the Client if there is
insufficient fund or cash flow to meet any payments due in respect of bills or
for the purposes of renewals of licenses, permits and certificates and the
consequences thereof.

 MALAYSIAN PROPERTY MANAGEMENT STANDARDS

STANDARD 8

INSURANCE MANAGEMENT

8.1.0 INTRODUCTION

8.1.1 The Property Manager shall assist the Client in the procurement of adequate
insurance cover to protect the interest of the Client.

8.1.2 Various insurance policies are available for insuring property against perils.
The Property Manager must have knowledge of such insurance policies as
well as an understanding on the adequacy of coverage, insurance premium
and insurance claims.

8.2.0 STATEMENTS OF STANDARD

8.2.1 The Property Manager shall advise the Client on the various perils that affect
the property and types of coverage available.

8.2.2 The Property Manager shall assist the Client to procure adequate coverage
for the different perils to protect the interest of the Client.

8.2.3 The Property Manager shall ensure that proper and timely billing of the
insurance premium is made to all owners who are liable to pay for it based on
an agreed apportionment.

8.2.4 The Property Manager shall report all damages and losses as and when they
occur and assist to make the appropriate claims to the insurers in accordance
with the insurance policies and procedures.

8.2.5 The Property Manager shall ensure that monies received from any claim is
fully utilized for the purpose for which it was claimed for and all monies
received are deposited into the appropriate Client's or trust account, as the
case may be.

8.2.6 The Property Manager shall keep all monies entrusted to him in a safe and
proper manner and exercise due care and responsibility in handling money on
behalf of his Client. The Property Manager shall consider the buying of
adequate insurance coverage to cover the risk of loss of money held in transit.

8.3.0 EXPLANATIONS

8.3.1 TYPES OF INSURANCE POLICIES

The Property Manager must advise the Client to procure the relevant
insurance policies to insure the property against the various perils. He must
ensure the proper types of insurance policies are taken out. He may advise on
the adequacy of all insurance policies and the risks that the Client will be
exposed to if the policies do not provide sufficient cover.

The common types of insurance policies available include the following:

i. Fire insurance

Fire insurance cover shall include cost of demolition and removal of debris
and reinstatement or rebuilding. The Property Manager shall recommend
to his Client to seek the advice of the relevant professionals in ascertaining
the insurance value of the property. In such an event, the Client may
commission and bear the cost of a valuation report prepared for fire
insurance purposes.

Depending on the Client's requirement, the fire insurance policy may also
include provisions for any possible consequential loss of rent payable for
the period during which the building is unusable or only partly useable
whilst it is being rebuilt or repaired in the event of the property being
affected by fire.

ii. Public liability insurance

Public liability insurance is to indemnify the Client, the Property Manager

and the Client's agents against claims for damages arising from acts of
negligence or omission by the Client and/or his servants/agents.

iii. All risks insurance

An all risks policy is to cover all other possible perils.

iv. Plate glass insurance

Where the property has glass front or glass external cladding, a plate
glass insurance policy should be considered.

v. Others

The Property Manager may inform the Client of the services offered by
insurance brokers who provide more extensive advice on insurance
matters and on any other insurance products available.

 MALAYSIAN PROPERTY MANAGEMENT STANDARDS

STANDARD 9

HEALTH, SAFETY & EMERGENCY MANAGEMENT

9.1.0 INTRODUCTION

9.1.1 In every property, there exists the possibility of incidents and accidents
occurring which may create emergencies and a risk to the occupants of or
visitors to the property.

9.1.2 As part of good property management practice, the safety and well being of
occupants and visitors should be of prime concern to the Property Manager.

9.1.3 This section covers the Property Manager's scope in the management of the
health, safety and emergency issues for the property.

9.1.4 Some types of risks, hazards and emergencies that affect property include:

i. Fire;
ii. Bomb or biological or chemical agent threat;
iii. Natural disasters - such as earthquake, landslide, flood
iv. Power failure;
v. Aging of structural components and structural failure;
vi. Mechanical and electrical equipment failure;
vii. Corrosion and leakage;
viii. Effluent and toxic waste contamination;
ix. Riot, demonstration and civil disorder;
x. Pandemic.

9.2.0 STATEMENTS OF STANDARD

9.2.1 The Property Manager shall keep abreast and ensure compliance at all times
of the various legislations and regulations that relates to the health and safety
of the occupiers of and visitors to the property.

9.2.2 The Property Manager shall be aware of and be able to identify the possible
risk and safety issues which may affect the property he manages and takes
necessary measures to prevent or reduce the possible risk.

9.2.3 Where appropriate, the Property Manager shall prepare an Emergency

Management Plan that may include the following:

i. Formation of an Emergency Response Team;

ii. A manual incorporating standard operating and evacuating procedures for
the various potential emergencies;
iii. Training for the various emergencies and conducting regular evacuation
drills.

9.3.0 EXPLANATIONS

9.3.1 It is prudent for the Property Manager to develop a safety and security
programme that meets the Client's and occupiers' needs. Such a programme
is to prevent safety and security breaches and to detect them should they
occur and follow through with proper actions to minimise harm to people and
damage to property.

9.3.2 It is important that the Property Manager ensures that the properties and the
surrounding environment under his care complies with the requirements of the
Department of Occupational Safety and Health (DOSH), the Occupational
Safety Health Act 1994 (OSHA) and other related Acts. DOSH will ensure
thorough enforcement and promotional works that employers and employees
always practise safe and healthy work culture as well as comply with existing
legislation, guidelines and codes of practice. OSHA provides the legislative
framework to secure the safety, health and welfare among the Malaysian
workforce and to protect them against risks on safety or health in connection
with the activities of the personnel at work.

9.3.3 Where appropriate, the Property Manager shall advise the Client on the
appointment of safety personnel

 MALAYSIAN PROPERTY MANAGEMENT STANDARDS

STANDARD 10

TENANCY/LEASt MANAGEMENT

10.1.0 INTRODUCTION

10.1.1 The role of a Property Manager may include Tenancy/Lease Management.

10.1.2 The Property Manager's role in Tenancy/Lease Management will involve

aspects of collection and disbursement of rents, tenants' liaisons, coordination
between contractors, management of utilities and services, and monitoring
reinstatement of premises upon termination or expiry of the tenancy or lease.

10.2.0 STATEMENTS OF STANDARD

10.2.1 The Property Manager shall ensure that all dealings and transactions are
ethical and transparent with his Client's best interests protected at all times.

10.2.2 Depending on the scope of work, the Property Manager shall implement
relevant processes for the collection of rents, service charges, car park
charges and/or other relevant charges and shall keep proper accounts of all
monies collected.

10.2.3 The Property Manager shall ensure proper documentation and records are
kept on the Client's property and inventories. He must ensure that these items
are kept in good condition, with the exception of fair wear and tear.

10.2.4 The Property Manager shall have a good understanding of the covenants that
are entered into between the landlord/lessor and tenant/lessee in the
tenancy/lease agreement, and be well versed with legal provisions relating to
landlord and tenant matters as well as those under Contract Law.

10.2.5 The Property Manager shall ensure that the covenants express or implied, are
observed by the tenant or the lessee, under the tenancy/lease agreement
throughout the duration of the tenancy/lease. He shall diligently monitor and
enforce the covenants without fear or favour at all times.

10.2.6 The Property Manager shall ensure that delivery of vacant possession and
handing/taking over are properly executed when tenants are moving in or
moving out. This may include full reinstatement of the property to its original
condition.

10.3.0 EXPLANATIONS

10.3.1 The Property Manager plays an important role as the link between the
landlord/lessor and the tenant/lessee. Whilst ensuring that the tenant /lessee
has quiet enjoyment of the demised premises, the Property Manager must
also ensure that the tenant/lessee observes all house rules and complies with
all his obligations under the tenancy/lease agreement.
10.3.2 The Property Manager may be required to collect rents in addition to service
charges. He must ensure that all monies are properly collected and accounted
for in the appropriate accounts.